ESN Paris

Investing in the technology-driven German „Mittelstand“

From melting steel... ...to 3D printing

ESN European Conference Paris 7 April 2016

Long-terminvestments

1holding

company

1. Business model highlights

2

~500€m sales

2,550staff

27years of

experience

17direct

subsidiaries

Technologymade in Germanyfor the world markets

(direct or indirect export)

Alwaysin search of new

“hidden champions”

M&Ais an ongoing process

Succession issues

100% takeovers

New management acquires

10% to 20%

~100,000 German SMEsface succession in the years ahead

1. Business model

Materials Machines Tools Components

Our world: B-to-B and investment goods. From melting steel to 3D printing.

Our mission: Being successful by supporting our customers’ success

with products and services made in Germany.

Services

3

25%Passenger and

commercial vehicles

1. Business model

4

15%Iron, plate and

metal processing, tool construction

15%Machine and

plant construction

Our customer sectors: widely spread.

12%Other

5%Chemical and petrochemical

industry

6%Energy

6%Agricultural technology

5%Electrical, medical

technology, household goods

3%Construction,

air conditioning, sanitary industry

4%Consumer goods

industry

4%Foundries and

roller mills

1. Business model – Materials (sales and staff FY 2014)

5

Providing high-alloyed tool steel

Europe’s leading centre for

special steels

Distributing around the world

for decades. Own subsidiaries in Asia.

~ 3,000 customers from the investment

goods industry (machines, tools, etc.)

One of the first apps in the industry.

However: personal contact

is king.

Extensive expertise

from in-house steel foundry, casting,

coating & hardening

€ 172 m sales500 staff

1. Business model – Machines and systems (sales and staff FY 2014)

6

Makes things run smoothly Worldwide: 85% export ratio.

Loading arms for

gases and liquids

Specialty

LNG

Provides accuracy and safety

Straightening machines

and wheel set presses

World market leader

in both divisions

€ 44 m sales 182 staff


1. Business model – Tools (sales and staff FY 2014)

7

Supports accurate production

Large, complextools

for car body parts

Large in-house presses;

strongservice business


Moulds for

aluminiumdie-casting

Supports lightweight construction


In-housefoundry

with three die-casting presses

1. Business model – Components (sales and staff FY 2014)

8

Reliable parts for farmers

Europe’s leading forge for

agricultural wear parts

Founded in1836

well-established brand


Supports stable production processes


Paper and

plastic sticks

Sweets and hygienicindustries

90% export ratio

1. Business model – Services (sales and staff FY 2014)

9

Provides precision and creativity

High-precison

wire erosion and

die sinking

Successful

3D printingbusiness unit

€ 8.3 m sales 57 staff

Increases the lifetime of means of production

Coating & hardening

division

Provides different technologies

plus in-depth expertise

Subsidiaries’ FY = calendar year

Please keep in mind:

10

2. Financial year 2015/2016

Jan. Dec.

MarchApril

GESCO AG / GESCO Group FY = 1 April to 31 March

How did we start? Initial situation and expectations for 2015/2016 (as at annual accounts press conference on 25 June 2015)

+Positive forecasts:

GDP +2.1%VDMA +2% GKV +2.6%


11

-Low oil price oil industry

reluctant to invest

-Agricultural technology still weak

-Some tool

manufacturers in the Group expect weaker business (cyclical effects)

-Two restructuring

cases still negatively

affecting margins

+Business at a

satisfactory level, e.g. at

Dörrenberg, Haseke, Setter

• sales should grow organically

• plus inorganic growth (Setterstix)

• but margins continue to be too low

+Setterstix

(acq. Jan. 2015)provides external

growth

Where are we now? Situation after first nine months

Pretty lively

customer demand

2. Financial year 2015/2016 – Q1 to Q3

12

Earnings grow even stronger,

especially due to:

Growingorder intake

and sales

operating improvements;

better than expected e.g.

CFKWBL Group

Setter Group

restructuring activities at 2 subsidiaries

(MAE and Protomaster) proceeding

2. Financial year 2015/2016 – Q1 to Q3 (Jan. to Sept. 2015 at subsidiaries)

Q1 to Q32014/2015

Q1 to Q32015/2016 Change

Order intake € m 340.0 378.1 11.2%

Sales € m 337.9 369.2 9.3%EBITDA € m 34.4 40.5 17.6%EBIT € m 20.4 25.3 23.7%Group net incomeafter minority interest € m 10.5 12.9 24.1%

EPS acc. to IFRS € 3.14

31/03/2015

3.90

31/12/2015

24.1%

Equity € m 182.8 190.6 4.3%Equity ratio % 45.3 44.1 -Liquid funds € m 35.3 37.9 7.5%

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Organic: +6.5%

Organic: +8.5%

Solidbalancesheet,

room forgrowth

€ 5.8 m dividend

paid out in Q2

Prettylively

business

Operating improvements,

restructuringactivities

proceeding

2. Financial year 2015/2016 – Q4 (Oct. to Dec. 2015 at subsidiaries)

How are we proceeding? As expected, customer demand slightly calmed down in Q4. (preliminary figures)

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Q4 2015/2016

-4.4%

€ 108.8 m € 104 m

Q4 2014/2015

Order intake Sales

Q4 2015/2016

+5.8%

€ 113.4 m € 120 m

Q4 2014/2015

Where do we go from here? General current situation: a mixed picture.

Already in July,

VDMA cut outlook from +2%

to zero growth


15

Declining demandfrom

China due to decreasing

growth

Oil and chemical industry still

hesitant to invest

Resummee as at half year (Nov. 2015)

• No indication of a significant, widespread decline in demand

• But no notable growth impetus either

Within GESCO Group

Many profit warningson the

stock market

2. Financial year 2015/2016 – Outlook

Target figures for Group sales.

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2014/2015Actual

2015/2016GuidanceJune 2015

€ 451 m

€ 490 m to

€ 480 m

2015/2016GuidanceFeb. 2016

€ 490 m+8.5% yoy

2. Financial year 2015/2016 – Outlook

Target figures for Group net income after minority interest.

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2014/2015Actual

2015/2016GuidanceJune 2015

€ 12.4 m

€ 14.0 m to

€ 12.5 m

2015/2016GuidanceFeb. 2016

+29.5% yoy € 16 m

3. Share price development (in %) – 1 and 5 years

GESCO vs. SDAX, 1 year GESCO vs. SDAX, 5 years

18

─ GESCO─ SDAX

80

85

90

95

100

105

110

70

80

90

100

110

120

130

140

150

160

170

180

Free float: 85.5%

Stefan Heimöller, entrepreneur, member of supervisory board: 14.5 %

Investmentaktiengesellschaft für langfristige Investoren TGV: 11.9 %

Dividend policy: payout ratio approx. 40 % of Group net income after minority interest

Appendix – Shareholder structure and dividend policy

19

Founded: 1989Share capital: € 8,645,000Shares: 3,325,000 registered sharesFree float: 85.5%Stock markets: Xetra; Frankfurt (regulated market);

Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market)

Sec. identification number: A1K020ISIN: DE000A1K0201IPO: 24/03/1998 End of financial year: 31 MarchDesignated sponsors: equinet Bank AG

Oddo Seydler Bank AG

Appendix – Facts and figures for GESCO AG

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Appendix – GESCO Group overview

Company Sales 2014€‘000

Staff31/12/2014

GESCO AG shareholding

Astroplast Kunststofftechnik GmbH & Co. KG 16,646 92 80%

Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 9,492 108 100%

C.F.K. CNC-Fertigungstechnik Kriftel GmbH 8,330 57 80%

Dömer GmbH & Co. KG Stanz- und Umformtechnologie 14,719 102 100%

Dörrenberg Edelstahl GmbH 171,683 501 90%

Frank Group 28,225 274 90%

Franz Funke Zerspanungstechnik GmbH & Co. KG 16,861 81 80%

Haseke GmbH & Co. KG 12,742 63 80%

Hubl GmbH 10,806 101 80%

Georg Kesel GmbH und Co. KG 12,454 69 90%

MAE Maschinen- und Apparatebau Götzen GmbH 24,768 160 100%

Modell Technik Formenbau GmbH 13,948 115 100%

Protomaster GmbH 8,630 110 82.17%

Setter Group 14,567 59 100%

SVT GmbH 44,104 182 90%

VWH Vorrichtungs- und Werkzeugbau Herschbach GmbH 11,151 109 80%

Werkzeugbau Laichingen Group 25,196 178 85%21

Appendix – GESCO management

Executive Board

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Dr-Ing Hans-Gert Mayrose * 1958. Joined GESCO in 2000, board member since 2002. M&A, IR, advising holdings. Many years of management experience in the domestic and international capital goods business.

Robert Spartmann* 1960. Board member since 2001. Financials, legal, HR, advising hol-dings. Tax advisor and auditor. Many years of experience in SMEsector. From 1995 to 2000 external advisor for GESCO Group.

Dr Eric Bernhard * 1972. Board member since Jan. 2016. Stra-tegic and operating development of subsi-diaries. Many years of management experi-ence in consulting and various industries.

Appendix – GESCO management

Supervisory Board

23

Klaus MöllerfriedrichChairman

* 1947 Co-founder of GESCO.

Board member since 1989. Tax advisor, auditor,

consultant.

Stefan HeimöllerDeputy Chairman

* 1963Board member since 2013.

Business owner / entrepreneur.

Dr Nanna Rapp * 1969

Board member since 2015. MD of E.ON InhouseConsulting GmbH.

Appendix – Financial calendar

Financial calendar

7 April 2016 ESN European Conference, Paris

30 June 2016 Annual Accounts Press Conference and Analysts’ Meeting

15 August 2016 Q1 figures (01/04 to 30/06/2016)

25 August 2016 Annual General Meeting

15 November 2016 Q2 figures (01/04 to 30/09/2016)

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Investor RelationsGESCO AG Phone: +49 202 24820-18 Investor Relations Fax: +49 202 24820-49Oliver Vollbrecht E-mail: [email protected] 7 Internet: www.gesco.de 42103 WuppertalGermany

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